Is there federal subject matter jurisdiction when π1 from California and π2 from California file claims against ∆ from Alabama with amounts of $200k and $50k respectively?

The correct answer is based on the principle of diversity jurisdiction under federal law. In cases of diversity jurisdiction, federal courts require that all plaintiffs must be from different states than all defendants. This is known as the requirement for "complete diversity." In the scenario provided, both plaintiffs are from California, and they are suing a defendant from Alabama, which creates an issue of incomplete diversity.

However, the key aspect of the answer suggests that even though there is incomplete diversity, the decision does not preclude federal jurisdiction for related claims. Under the supplemental jurisdiction rule, federal courts can hear related claims that do not independently qualify for jurisdiction if they form part of the same case or controversy. Here, the claims by the two California plaintiffs against the Alabama defendant could be considered related, especially if they arise from a common set of facts or issues. Therefore, federal jurisdiction can still exist based on the relatedness of the claims even when there is incomplete diversity.

This is why the choice indicating that jurisdiction exists due to actions only affecting incomplete diversity is applicable. It reflects the nuanced understanding of how federal jurisdiction can still operate even in situations where complete diversity is not present, particularly concerning related claims.